Question 1

When we draw a demand curve for automobiles, which of the following is allowed to vary along the demand curve?

Accepted Answer

A)  tastes and preferences of consumers 
B)  future expectations of consumers 
C)  money income of consumers 
D)  the price of automobiles 
A)  tastes and preferences of consumers 
B)  future expectations of consumers 
C)  money income of consumers 
D)  the price of automobiles

Question 2

Which of the following is a demand shifter for coffee?

Accepted Answer

A)  price of tea 
B)  price of coffee 
C)  number of coffee growers 
D)  technology of coffee production 
A)  price of tea 
B)  price of coffee 
C)  number of coffee growers 
D)  technology of coffee production

Question 3

When a market is in equilibrium, there will be no tendency for the market price to change over a given period of time.

Accepted Answer

A) True 
 B)False

Question 4

Suppose that under the North American Trade Agreement (NAFTA), more Canadian potatoes are shipped to the U.S. to be sold. Assuming the market moves to its new equilibrium, we can expect an increased

Accepted Answer

A)  demand for potatoes in the U.S. 
B)  demand for potatoes in Canada 
C)  supply of potatoes in Canada 
D)  supply of potatoes in the U.S. 
A)  demand for potatoes in the U.S. 
B)  demand for potatoes in Canada 
C)  supply of potatoes in Canada 
D)  supply of potatoes in the U.S.

Question 5

Suppose that the supply of music CDs increases. What happens to the equilibrium price and equilibrium quantity of music CDs?

Accepted Answer

A)  increase in the equilibrium price and a decrease in the equilibrium quantity 
B)  increase in the equilibrium price and an increase in the equilibrium quantity 
C)  decrease in the equilibrium price and an increase in the equilibrium quantity 
D)  decrease in the equilibrium price and a decrease in the equilibrium quantity 
A)  increase in the equilibrium price and a decrease in the equilibrium quantity 
B)  increase in the equilibrium price and an increase in the equilibrium quantity 
C)  decrease in the equilibrium price and an increase in the equilibrium quantity 
D)  decrease in the equilibrium price and a decrease in the equilibrium quantity

Question 6

According to the income effect, when the price of Coca Cola falls, its price falls relative to the price of Pepsi Cola. Consumers thus have an incentive to purchase more Coca Cola and less Pepsi Cola.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following causes a decrease in the quantity demanded of Canadian wheat?

Accepted Answer

A)  an increase in the price of U.S. wheat 
B)  an increase in the price of Canadian wheat 
C)  an increase in the number of farmers growing Canadian wheat 
D)  a decrease in the cost of producing Canadian wheat 
A)  an increase in the price of U.S. wheat 
B)  an increase in the price of Canadian wheat 
C)  an increase in the number of farmers growing Canadian wheat 
D)  a decrease in the cost of producing Canadian wheat

Question 8

All else being equal, if the demand curve for hamburgers decreases as consumers' incomes decrease, hamburgers are a(n)

Accepted Answer

A)  normal good 
B)  inferior good 
C)  substitute good 
D)  complementary good 
A)  normal good 
B)  inferior good 
C)  substitute good 
D)  complementary good

Question 9

______ is a schedule that shows various amounts of a good or service a buyer is willing and able to purchase at each possible price during a particular period.

Accepted Answer

A)  Production possibilities curve 
B)  Capacity utilization 
C)  Demand 
D)  Supply 
A)  Production possibilities curve 
B)  Capacity utilization 
C)  Demand 
D)  Supply

Question 10

Figure 2.1 The Market for Calculators
  
-Refer to Table 2.1. The equilibrium price and equilibrium quantity of CD players are

Accepted Answer

A)  $150 and 300 players 
B)  $200 and 800 players 
C)  $250 and 600 players 
D)  $300 and 650 players 
A)  $150 and 300 players 
B)  $200 and 800 players 
C)  $250 and 600 players 
D)  $300 and 650 players

Question 11

According to the substitution effect, a decrease in the price of rice creates an increase in the purchasing power of consumers' money incomes. Therefore, consumers can purchase more rice with a given amount of money income.

Accepted Answer

A) True 
 B)False

Question 12

A subsidy placed on the production of wheat results in lower costs for wheat farmers and an increase in the supply.

Accepted Answer

A) True 
 B)False

Question 13

In a competitive market, the price of pears serves to

Accepted Answer

A)  signal consumers to buy more pears when there is a shortage 
B)  signal producers to supply more pears when there is a surplus 
C)  signal consumers to buy fewer pears when there is a surplus 
D)  ration pears among competing consumers 
A)  signal consumers to buy more pears when there is a shortage 
B)  signal producers to supply more pears when there is a surplus 
C)  signal consumers to buy fewer pears when there is a surplus 
D)  ration pears among competing consumers

Question 14

If the price of paper decreases, the supply curve of textbooks will shift to the right.

Accepted Answer

A) True 
 B)False

Question 15

Something that causes a change in demand is called a

Accepted Answer

A)  shortage 
B)  supply shifter 
C)  price 
D)  demand shifter 
A)  shortage 
B)  supply shifter 
C)  price 
D)  demand shifter

Question 16

When supply increases, the equilibrium price rises and the equilibrium quantity falls.

Accepted Answer

A) True 
 B)False

Question 17

Successful advertising by Pizza Hut would

Accepted Answer

A)  cause a downward movement along its existing demand curve 
B)  cause an upward movement along its existing demand curve 
C)  shift its demand curve backward to the left 
D)  shift its demand curve outward to the right 
A)  cause a downward movement along its existing demand curve 
B)  cause an upward movement along its existing demand curve 
C)  shift its demand curve backward to the left 
D)  shift its demand curve outward to the right

Question 18

If the demand for a good is positively related to the price of another good, the two goods are

Accepted Answer

A)  complementary goods 
B)  substitute goods 
C)  inferior goods 
D)  normal goods 
A)  complementary goods 
B)  substitute goods 
C)  inferior goods 
D)  normal goods

Question 19

An increase in the price of baseballs will cause the demand curve for baseballs to shift to the left.

Accepted Answer

A) True 
 B)False

Question 20

People like to put marshmallows in their hot chocolate. An increase in the price of hot chocolate mix will have what effect on the marshmallow market?

Accepted Answer

A)  decrease the equilibrium price and quantity of marshmallows 
B)  increase the equilibrium price and quantity of marshmallows 
C)  decrease the equilibrium quantity and increase the equilibrium price of marshmallows 
D)  have no effect on the equilibrium quantity or price of marshmallows 
A)  decrease the equilibrium price and quantity of marshmallows 
B)  increase the equilibrium price and quantity of marshmallows 
C)  decrease the equilibrium quantity and increase the equilibrium price of marshmallows 
D)  have no effect on the equilibrium quantity or price of marshmallows

When we draw a demand curve for automobiles, which of the following is allowed to vary along the demand curve?

Which of the following is a demand shifter for coffee?

When a market is in equilibrium, there will be no tendency for the market price to change over a given period of time.

Suppose that under the North American Trade Agreement (NAFTA), more Canadian potatoes are shipped to the U.S. to be sold. Assuming the market moves to its new equilibrium, we can expect an increased

Suppose that the supply of music CDs increases. What happens to the equilibrium price and equilibrium quantity of music CDs?

According to the income effect, when the price of Coca Cola falls, its price falls relative to the price of Pepsi Cola. Consumers thus have an incentive to purchase more Coca Cola and less Pepsi Cola.

Which of the following causes a decrease in the quantity demanded of Canadian wheat?

All else being equal, if the demand curve for hamburgers decreases as consumers' incomes decrease, hamburgers are a(n)

______ is a schedule that shows various amounts of a good or service a buyer is willing and able to purchase at each possible price during a particular period.

Figure 2.1 The Market for Calculators -Refer to Table 2.1. The equilibrium price and equilibrium quantity of CD players are

According to the substitution effect, a decrease in the price of rice creates an increase in the purchasing power of consumers' money incomes. Therefore, consumers can purchase more rice with a given amount of money income.

A subsidy placed on the production of wheat results in lower costs for wheat farmers and an increase in the supply.

In a competitive market, the price of pears serves to

If the price of paper decreases, the supply curve of textbooks will shift to the right.

Something that causes a change in demand is called a

When supply increases, the equilibrium price rises and the equilibrium quantity falls.

Successful advertising by Pizza Hut would

If the demand for a good is positively related to the price of another good, the two goods are

An increase in the price of baseballs will cause the demand curve for baseballs to shift to the left.

People like to put marshmallows in their hot chocolate. An increase in the price of hot chocolate mix will have what effect on the marshmallow market?

Scarcity and Choice

Demand and Supply Applications

Production and the Costs of Production

Competition and Monopoly: Virtues and Vices

Imperfect Competition

Labor Markets

Government and Markets

The Mixed Economy of the United States

Gross Domestic Product and Economic Growth

The Business Cycle, Unemployment, and Inflation

Macroeconomic Instability: Aggregate Demand and Aggregate Supply

Fiscal Policy and the Federal Budget

Money and the Banking System

The Federal Reserve and Monetary Policy

The United States and the Global Economy

International Finance

Economic Systems and Developing Countries

Filters

Exam 2: Market Transactions: Demand and Supply Analysis

When we draw a demand curve for automobiles, which of the following is allowed to vary along the demand curve?

Which of the following is a demand shifter for coffee?

When a market is in equilibrium, there will be no tendency for the market price to change over a given period of time.

Suppose that under the North American Trade Agreement (NAFTA), more Canadian potatoes are shipped to the U.S. to be sold. Assuming the market moves to its new equilibrium, we can expect an increased

Suppose that the supply of music CDs increases. What happens to the equilibrium price and equilibrium quantity of music CDs?

According to the income effect, when the price of Coca Cola falls, its price falls relative to the price of Pepsi Cola. Consumers thus have an incentive to purchase more Coca Cola and less Pepsi Cola.

Which of the following causes a decrease in the quantity demanded of Canadian wheat?

All else being equal, if the demand curve for hamburgers decreases as consumers' incomes decrease, hamburgers are a(n)

______ is a schedule that shows various amounts of a good or service a buyer is willing and able to purchase at each possible price during a particular period.

Figure 2.1 The Market for Calculators -Refer to Table 2.1. The equilibrium price and equilibrium quantity of CD players are

According to the substitution effect, a decrease in the price of rice creates an increase in the purchasing power of consumers' money incomes. Therefore, consumers can purchase more rice with a given amount of money income.

A subsidy placed on the production of wheat results in lower costs for wheat farmers and an increase in the supply.

In a competitive market, the price of pears serves to

If the price of paper decreases, the supply curve of textbooks will shift to the right.

Something that causes a change in demand is called a

When supply increases, the equilibrium price rises and the equilibrium quantity falls.

Successful advertising by Pizza Hut would

If the demand for a good is positively related to the price of another good, the two goods are

An increase in the price of baseballs will cause the demand curve for baseballs to shift to the left.

People like to put marshmallows in their hot chocolate. An increase in the price of hot chocolate mix will have what effect on the marshmallow market?

Scarcity and Choice

Demand and Supply Applications

Production and the Costs of Production

Competition and Monopoly: Virtues and Vices

Imperfect Competition

Labor Markets

Government and Markets

The Mixed Economy of the United States

Gross Domestic Product and Economic Growth

The Business Cycle, Unemployment, and Inflation

Macroeconomic Instability: Aggregate Demand and Aggregate Supply

Fiscal Policy and the Federal Budget

Money and the Banking System

The Federal Reserve and Monetary Policy

The United States and the Global Economy

International Finance

Economic Systems and Developing Countries

Filters